Exam 18: Consolidation: Controlled Entities

Where there is a substantial non-controlling interest and the non-controlling shareholders do not object,AASB 10 Consolidated Financial Statements allows such subsidiaries to be excluded from consolidation.

Where a parent is exempted from preparing consolidated financial statement under AASB 10 Consolidated Financial Statements,they are still required to present separate financial statements under AASB 127 Separate Financial Statements.

Rights to variable returns from an investee include:

AASB 10 Consolidated Financial Statements defines a 'parent' and a 'subsidiary' as which of the following?

Power is defined in AASB 10 Consolidated Financial Statements as the current ability to direct the relevant activities of an investee.

Kowloon Limited is an entity listed in Hong Kong.Kowloon Limited holds a 100% investment in Aussie Pty Ltd,an Australian based company,who in turn holds a 90% interest in Skippy Pty Ltd.Aussie Pty Ltd and the Aussie group (comprising Aussie and Skippy)are both non-reporting entities.Which of the following statements is correct?

When one entity controls another entity,the business combination results in which of the following types of relationship?

An entity can control another entity with an ownership interest of less than 50%,but only if there is a legally-binding contract in place between all investors that passes control to the entity.

In a consolidated group of entities,control over the subsidiaries in the group:

Where an entity controls another entity but holds less than half of the other entity's voting rights,AASB 12 Disclosure of Interests in Other Entities,requires which of the following disclosures be made?

Which of the following is not one of the factors in AASB 3 Business Combinations that guide the identification of the acquirer where 2 companies combine to form a new company?

There are no disclosures specified by AASB 10 Consolidated Financial Statements.

The process of preparing the combined financial statements of a group of entities is known as:

Which of the following is not included in the definition of an investment entity as per IFRS 10 Consolidated Financial Statements?

The key characteristic that determines when consolidated financial statements should be prepared is:

Control is the criterion for determining whether a parent-subsidiary relationship exists.

A subsidiary is an entity that:

According to AASB 10 Consolidated Financial Statements,which of the following factors indicate the existence of control? I.Possessing existing rights that give the current ability to direct the relevant activities. II.Shared power in the governance of financial and operating policies of another entity so as to obtain benefits. III.The power to have significant influence over the operating policies of an entity so as to obtain benefits. IV.Ownership of more than 50% of the voting rights in the subsidiary.

The consolidation process involves making adjustments to the individual financial statements and ledger accounts of the entities within the group.

Juliet Ltd is a listed public company and has an 60% controlling interest in Marley Pty Ltd.Marley Pty Ltd is the parent of Butterscotch Pty Ltd.In which of the following situations will Marley Pty Ltd not be required to prepare consolidated financial statements?